M/s. Selvam Broilers (P) Ltd. MA. Subaidabegun Versus State of Kerala

2015 (4) TMI 251 - SUPREME COURT

Benefit of the exemption under the notification SRO No.1727 of 1993 - entire turnover from sales of chicks and chicken are exempt from the levy of tax under the KGST Act - Whether one-day chicks that the dealer purchases from the State of Tamil Nadu and rears in the State of Kerala are exempted from payment of tax in view of Notification No.1723 of 1993 which has come into effect from 04.11.1993 - Held that:- Object of the notification ought to be considered in placing correct interpretation on .....

4 of the notification contemplates two categories of dealers, (i) a poultry farmer and (ii) hatcheries. What is exempted under the notification is the turnover from sales of chicks and chickens by both types of dealers. It is not specified that if a poultry farmer imports or effects inter-State purchase of chicks and chickens, it would be ousted from the purview of the notification and thus, not be entitled to the benefits of the notification. In our considered opinion, language of the notificat .....

a poultry farm. In its poultry farm, it not only engages in hatching of the eggs but also involves in firstly, inter-State purchase of one-day chicks from the State of Tamil Nadu, secondly, rearing of the chicks in the State of Kerala and thereafter, effecting the sale of chicks and chicken within the State. 3. During the assessment proceedings for the relevant assessment year 1998-1999, the assessing authority was of the view that the one-day chicks brought by the dealer from outside the State .....

efore the Sales Tax Appellate Tribunal, Ernakulam (for short, "the Tribunal"). The assesseealongwith the grounds against estimation of additional turnover fixed by the authorities below, had raised fresh grounds seeking benefit of the exemption under the notification SRO No.1727 of 1993 (for short, "the notification") and claimed that the entire turnover from sales of chicks and chicken are exempt from the levy of tax under the KGST Act. 6. The Tribunal had considered the cla .....

hickens brought from outside the State and hence, partly allowed the appeal by order dated 30.11.2004. 7. It is this order of the Tribunal which was questioned by the respondent-State in the Revision Petition filed before the High Court. 8. The High Court has considered the object and purpose of the notification, that is, to encourage the poultry farmers and the hatcheries within the State, who rear chicks and chickens in the State and consequently, keeping in its view the aforesaid, observed th .....

assailing the impugned judgment and order submit that since the language of the notification is unambiguous, the High Court ought not to have delved into the object and reasons which prompted the respondent-State Government to issue the notification. He would further submit that the notification does not prescribe any conditions for the applicability of exemption contained therein for the poultry farms and hatcheries in the State and therefore, the exemption therein would apply to the activity c .....

nsideration and decision is whether one-day chicks that the dealer purchases from the State of Tamil Nadu and rears in the State of Kerala are exempted from payment of tax in view of Notification No.1723 of 1993 which has come into effect from 04.11.1993. 13. In these appeals, we are concerned with the assessment years 1993-94, 1997-1998 and 1998-1999. It is neither in dispute nor has it been disputed that the notification SRO No.1727 of 1993 would be applicable for the aforesaid assessment year .....

ds mentioned in column (3) against them, subject to the conditions and restrictions, if any, specified in column (4) thereof against each; ***** Schedule III Dealers whose turnover of sale or purchase is exempt under sub-clause (2) of clause 1. Sl. Name of Turnover which conditions No. Dealer is exempted and Restrictions (1) (2) (3) (4) 24. Poultry farmers Turnover of sale Nil including hatcheries of chicks and in the State chickens." 15. The language of the notification is unambiguous and .....

cing correct interpretation on the entries employed thereunder and thus, must receive a liberal construction. It is well settled that a provision providing for an exemption has to be construed strictly. In cases wherein the language of the exemption contained in the notification is simple, clear and unambiguous, the exemption notification must be given its natural meaning and the object and purpose of the notification need not be looked into. (CCE v. Favourite Industries, (2012) 7 SCC 153). In N .....

ase of ambiguity, a taxing statute should be construed in favour of the assessee- assuming that the said principle is good and sound-does not apply to the construction of an exception or an exempting provision; they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the State. This is for the reason expla .....